Legal Opinionfor: Ms. Kristen Ostling - Campaign for Nuclear Phase-OutMs. Brennain Lloyd, Ms. Kathie Broesmer - North WatchMs. Cecilia Fernandez - Clean NorthMr. Steven Shallhorn - GreenpeaceMs. Elizabeth May, Mr. Andrew Chisholm - Sierra Club of CanadaDr. Gordon Edwards - Canadian Coalition for Nuclear ResponsibilityChief Tim Thompson - Mohawk Council of AkwesasneDr. Ole Hendrickson - Concerned Citizens of Renfrew CountyMr. Marc Chenier - Centre d’analyse des politiquesMr. Norman Rubin - Energy Probe Research FoundationChief Larry Sault - Association of Iroquois and Allied Indians Thank you for the opportunity to provide a summary legal opinion regarding the legality of a decision of the Department of Transport Canada, namely an approval to an amendment of AECL’s Emergency Response Assistance Plan pertaining to the Transportation of Mixed Oxide Fuel (MOX) from Sault Ste. Marie to Chalk River, Ontario. That plan was originally approved in November, 1999, based on transport by road. The January 10, 2000 amendment allowed transport by air. While you have serious concerns about the "Parallex" Test Project as a whole, including transport of MOX fuel to, in and through Canada by any mode of transport, this opinion is directed only at the January 10, 2000 Department of Transport decision. We understand that you will be publicly releasing this opinion on or about February 22, 2000. SUMMARY OF CONCLUSIONS: We have arrived at the following conclusions:

The public relied on the application documents and the Department of Transport’s original report, accompanying the original approval. It included a statement that flying MOX was illegal in Canada. There was therefore no reason for the public to expect the amendment nor the flights.

We are of the opinion that the decision made by the Department of Transport to amend the Emergency Response Assistance Plan to allow transport by air was unreasonable and therefore illegal, pursuant to administrative law principles.

We are of the opinion that the Department of Transport acted illegally in failing to consult with the public before making a significant amendment to the plan such as changing the approved mode of transport from road to air.

Because of concerns as to future flights of MOX, you should first pursue the solutions described below under the section titled, "Legislative Solutions".

You should reserve the right to initiate Judicial Review proceedings in the Federal Court of Canada should there be no action by the government of Canada to ensure no continued flights of MOX fuel in Canada.

Pursuant to discussions that you have held with U.S. counsel, Terry Lodge, Esq., Canadian groups and individuals affected by and concerned about the flights of MOX fuel in Canada should support and even join in that U.S. litigation as parties.

PART I – SELECTED FACTS On November 4th (announced November 16th, 1999), Transport Canada approved emergency response assistance plans submitted to Atomic Energy of Canada, Ltd. relating to transport of Mixed Oxide (MOX) fuel samples from the United States and Russia to Chalk River, Ont. Transport Canada conducted a nine-week public consultation process prior to granting its approval. At the time of announcing the approval, Transport Canada issued its report titled "Transport Canada Review of Two Emergency Response Assistance Plans Proposed by the Atomic Energy of Canada Limited for the Importation of up to Six Shipments of Test Samples of MOX Fuel". I refer to this document below as the "Report". On January 14th, Transport Canada posted to its web site and issued a News Release announcing that on January 10th it had issued an amendment to its approval of the emergency response plan dealing with the U.S. source MOX. This amendment allowed for air shipment. There was neither public notice nor consultation prior to the amendment. On January 14th, 2000, one helicopter flight of MOX fuel originating from the U.S. was flown from Sault Ste. Marie to Chalk River. The amended plan allows for a total of three shipments; therefore the remaining two shipments are now "approved" for either road or air transport. The amended plan did not deal with the Russian shipments. There is a fear that a similar process would see that emergency response plan also amended, again without public consultation or notice, to allow for air shipment, whether from the currently intended port at Cornwall, Ontario, or as members of CNP have suggested, from Halifax or even across the ocean. The Transport Canada web site posting describes the chronology leading to the amendment. It is astonishing in its speed. The web sites states that "In late December, 1999, the Atomic Energy of Canada Limited requested advice on the requirements to be satisfied should they wish to transport the MOX samples by air in Canada…" On December 21, 1999 AECB sent a letter to Transport Canada "explaining that the effects of a credible air accident would not necessarily be any more severe than the effects of a credible road accident." The document goes on to say that, "based on this assessment", "Transport Canada officials accepted the premise that the road mode emergency response assistance plan could be acceptable for air transport, provided there were an amendment to the road mode plan to address access to an accident site." In late December, AECL provided an informal copy of an amendment. On December 23, 1999, a Transport Canada official observed a "full dress exercise". On January 7, 2000, AECL submitted a formal request for approval of an amendment to its road mode emergency response plan to allow for the transport of MOX fuel by air from Sault Ste. Marie to Chalk River." The document notes that approval was granted on January 10, 2000. The United Nations Number for Radioactive material, fissile, n.o.s. is number UN2918. This is key to tracking the applicable regulations under the Transport of Dangerous Goods Act. The quantity of plutonium to be contained in each MOX test sample exceeds the minimum quantity or concentration set out in the TDG Act and therefore necessitated the requirement for approval of an emergency response assistance plan (ERAP) from Transport Canada before the importation and transportation of the MOX fuels, according to a letter of October 17, 1999 from the Minister of Transport, David Collenette, to Ole Hendrickson and Elizabeth May. The original Emergency Response Plans described the shipments in Canada as occurring by road from the U.S. and by ship from Russia; thereafter, by road only on the Canadian leg of the journeys. In the November, 1999 Report from the Department of Transport, which accompanied the original approval of the Emergency Response Plans for the shipments by road, there was an outline of some of the questions from the public, along with the Department’s responses. In particular there appears the following: "I. Mode of Transport "I.1 The Government could change air regulations. Could fly over less populated areas. [DoT response] Not until there were a container deemed safe enough to survive all credible airplane accidents. I.2 Notes that the United States do not want to fly the shipment. [DoT response] It is presently against both Canadian and United States law to fly the MOX test samples."PART II – LEGAL GROUNDS The question you have asked is whether the Department of Transport’s amendment of the emergency response plan pertaining to the shipment of the U.S. source MOX was legal. Transportation of Dangerous Goods Act The Transport of Dangerous Goods Act provides a general prohibition (section 5) against transporting dangerous goods unless certain requirements are met. These include compliance with "all applicable prescribed safety requirements", as well as a requirement that "the means of containment and transport comply with all applicable prescribed safety standards". Under section 7 of the Transportation of Dangerous Goods Act, it is necessary for anyone who wishes to transport fissile material in Canada to obtain approval from Transport Canada for an Emergency Response Assistance Plan, which must be approved by the Minister of Transport or his designate. This is the approval that was granted in November 1999 and then amended on January 10th, 2000. The Transport of Dangerous Goods Regulations (TDG Regs) cover MOX fuel transport. They do not explicitly authorize transport of MOX fuel by air. Transportation of international or domestic consignments of dangerous goods by aircraft is for the most part exempted from the Transportation of Dangerous Goods Regulations. The Regulations require domestic consignment of dangerous goods by aircraft to be "done in accordance with the International Civil Aviation Organization Technical Instructions." (TDG Regulation section 2.9) We have consulted the International Civil Aviation Organization’s Technical Instructions for the Safe Transport of Dangerous Goods by Air, which as mentioned, are incorporated by reference into the Canadian Transportation of Dangerous Goods Regulations. We have checked the 1999-2000 version. It states that for UN Shipping No. 2918 (radioactive material, fissile, n.o.s.), there is a "state variation" for Canada, referenced as State Variation CA1. That Variation reads as follows, "Any request concerning the applicability of variations CA-1, CA-2 or CA-3 must be addressed to AECB, Radioisotopes and Transportation Division. CA-1 Fissile radioactive material in any quantity may not be transported by aircraft to, from or over Canada without prior permission." Canada is the only country with such a notation for this class of material. Kristen Ostling found a reference in the Hansard record by the Hon. John Crosbie, from 1987, advising Parliament that Canada had imposed this protection by way of a "State Variation" to the international technical standard. We endeavoured to discover whether Canada gave permission in accordance with the ICAO notation, and who in Canada gave that permission. A letter from the Atomic Energy Control Board, dated February 3rd, 2000, responding to an enquiry by us on a different point, advised us that AECB gave AECL this permission on December 22 (revised December 23, 1999). This permission is described more fully below under the discussion dealing with the applicable AECB regulations. The Transport of Dangerous Goods Regulations expressly also require compliance with the Transport Packaging of Radioactive Materials Regulations which are administered by the AECB. Transport Packaging of Radioactive Materials Regulations -- SOR/83-740 On February 1, 2000, we wrote to the Director General of the AECB, to ascertain whether the AECB issued a package design approval certificate pursuant to section 15 of the Regulation, or an endorsement pursuant to section 16 of the Regulation. Not only must the package have one of these (or an authorization from the Board for a nonconforming package under section 4), but furthermore, the person proposing to transport the material must advise the Board in writing of their intended use of that certificate or endorsement and must have received written notice from the Board permitting their use of the certificate or endorsement. The Board may impose additional terms and conditions upon the use of the certificate or endorsement. (Section 10 of the Regulation). The new Director General of the AECB Secretariat, Mr. G.C. Jack, replied with a letter of February 3rd, enclosing a copy of an Approval dated December 22, 1999 and revised December 23, 1999. That approval expressly gave permission to AECL to ship one "Type B(U)F package, AECL model 4H. The approval expressly noted that "The shipment will leave Sault Ste. Marie, Ontario on December 29, 1999 directly to Atomic Energy of Canada Ltd., Chalk River Ontario via Helicopter Transport Services Canada." The December 23, 1999 revision to that approval added a statement requiring advance notification to the AECB Transportation Licensing Section if the shipment is delayed, "Prior to the departure of the shipment." In that same letter of February 3rd, 2000, Mr. Jack advised that "In addition to the packaging requirements, the Canadian Transport of Dangerous Goods Regulations, through reference to the technical instructions on safe transport of dangerous goods issued by the International Civil Aviation Organization, require that fissile material (including plutonium) in any quantity may not be transported by aircraft to, from, or over Canada without prior permission by Canada. AECL sought, and received, such approval from the AECB for this shipment. AECB staff gave such approval after ensuring that the shipment met all regulatory requirements." The permit issued to AECL by AECB contains a statement that "This authorization is issued pursuant to ICAO State Variation CA-1 (IATA equivalent CAG-01)." Administrative Law Requirements We have reviewed the January 10, 2000 decision by the Department of Transport to amend the Emergency Response Assistance Plan to allow transport by air as well as by road on the basis of its compliance with the principles of administrative law. There are two areas in which, in our opinion, the decision failed to comply with those principles. These are discussed below under the headings of "Unreasonability" and "Legitimate expectations". Unreasonability Administrative law principles protect against unreasonable decision making by public officials. The doctrine states that public officials’ powers must be exercised reasonably. The hurdle to prove unreasonability within the parameters of the courts’ tests is quite high. However, in this case, it is our opinion that the decision to amend the Emergency Response Assistance Plan to allow air transport of MOX rather than just road transport of MOX would be considered by the courts to be unreasonable. This finding would support a range of possible remedies, including to quash the decision; to grant a writ of prohibition against repeating the decision for the transport of the Russian MOX; and to grant a declaration that the decision offended administrative law principles. These remedies would therefore deal with both the additional two shipments authorized from the U.S. as well as the shipment still expected from Russia. The grounds for a claim that the decision was unreasonable would include both the substance of and the manner in which the decision was made. Some of the relevant facts include the following:

AECB made a statement on December 23, 1999, to Transport Canada that "the effects of a credible air accident would not necessarily be any more severe than the effects of a credible road accident." That statement is unsupported by any evidence whatsoever.

Evidence known to the government of Canada demonstrates that it is extremely dubious that the type of package used in the transport of MOX by air, the 4H Type B(U)F package would provide sufficient protection in case of an air accident. For example, an International Atomic Energy Agency technical document states that:

"…the safety standards currently used for multimodal approval of package designs do not cover the same large fraction of possible conditions likely to be encountered in an aircraft accident as are encountered in sea or land mode accidents."

There is no evidence that credible air accident scenarios were explored by Transport Canada before granting the amendment to the ERAP to allow air transport. The accident scenarios cited by AECL in its original ERAP and the approval of those scenarios by Transport Canada indicate the depth of analysis that should have been carried out for another mode of transport.

Transport Canada itself stated in its November, 1999 report, that "It is presently against both Canadian and United States law to fly the MOX test samples" and that the government could not fly the MOX "until there were a container deemed safe enough to survive all credible airplane accidents".

AECL stated in its original submissions, Transport Canada stated in consultations with the public before the road transport ERAP approval; and the U.S. Department of Energy stated that the MOX transport would be by road only and that air transport would not be considered.

Transportation of MOX fuel by air is illegal in the United States and in fact the U.S. Department of Transportation certification for the AECL package used in the transport expressly states that "This certificate provides no relief from the limitations for transportation of plutonium by air in the United States as cited in the regulations of the U.S. Nuclear Regulatory Commission".

The change in the transport mode is so significant that it amounts to a new plan and ought not to have been approved as an "amendment".

It is our opinion that the January 10, 2000 Transport Canada decision is unreasonable in fact and in law.

Doctrine of legitimate expectations: The doctrine of legitimate expectations is a common law principle, developed under the principles of general administrative law. Essentially it is the right to make representations. It is a rule of natural justice; a requirement for procedural fairness under principles of administrative law. We are of the view that the circumstances of this case meet the requirements of this doctrine. The Department of Transport engaged in a nine-week period of public consultation prior to the original approval. They notified and consulted with the general public, municipalities, fire departments and police departments, among others. In addition to all of the meetings with the public and public officials that were conducted in person, the Department of Transport received 122 submissions from the public before October 15, 1999 and another 11 submissions after that date, along with submissions through Natural Resources Canada, including 17 municipal council resolutions and a letter on behalf of 19 mayors in Quebec, and 10 Band Council Resolutions from First Nations in Quebec and Ontario, almost all expressing concerns about the transport of MOX in Canada. There are several sources for the understanding by the public that the MOX fuel would be transported by road only. These include statements in the November approval report by Transport Canada. As well, a document posted to the Transport Canada web site during the consultation, which was described as a 1997 AECB document outlining the Canadian regulations regarding MOX Parallex Tests expressly stated that: "The fuel test elements will be transported directly by truck from Los Alamos National Laboratory to Chalk River Laboratories without additional handling at the border crossing. The same transport will be used throughout." The AECL Transportation Plan for the Shipment, dated August 1999, stated that, "Air transport, rail and highway transport are all possible modes of shipping the LANL MOX fuel to CRL. However, evaluations done for the USDOE eliminated both air transport and rail options from further consideration. Accordingly, highway transport was the only mode considered in the current Canadian evaluation." The U.S. Department of Environment Environmental Assessment for the Parallex Project Fuel Manufacture and Shipment, dated January, 1999, stated that: "The restrictions imposed for transportation of plutonium by air prohibits this alternative for shipment of the MOX fuel quantities needed for the Parallex Project. In addition, air transport is considered to be more hazardous than ground transport due to the potential for greater distribution of radioactive materials in the event of a major air accident. This alternative was dismissed from further analysis." The public relied on these statements as well as on the Department’s November, 1999 report, accompanying the original approval. It included a statement made by the Department in the report, that flying MOX was illegal in Canada. There was therefore no reason for the public to expect the amendment nor the flights. It is our opinion that the Department of Transport’s January 10, 2000 decision breached the administrative law principle of fairness; in particular, the doctrine of legitimate expectations. The nature of the hazard, the interests at stake and the consultation process conducted prior to the November decision support the requirement that the Department extend to the public an opportunity to comment and provide input before a substantial amendment is made to the Emergency Response Assistance Plan. One text on administrative law describes part of the underlying reason for this doctrine: "A third source which feeds the concept of fairness is the simple recognition, firstly, that social order requires that individuals accept the decisions of public officials, and secondly, that this acceptance will not arise where individuals feel that they have been treated unfairly in the making of that decision." PART III – COURT PROCEEDINGS These judicial review remedies against the Department of Transport could be sought in the Federal Court of Canada. The kind of relief that you would be seeking does not have a specific time limit, other than "laches" or undue delay. The Courts also usually want to see any statutory or express appeal remedies exhausted before turning to the courts on a judicial review application. Although there are none in our case and therefore this will not be an issue, you do want to pursue any available political solutions to clarify the status of MOX flight in Canada, as quickly as possible. Therefore, it is reasonable to defer a decision to proceed with judicial review while you explore those options. If you launch this type of an application in the Federal Court, you can expect many interlocutory proceedings. For example, in the CANDU litigation that Sierra Club is involved in; the Nuclear Liability Act litigation that Energy Probe was involved in; and other cases, the Applicants were obliged to respond to many interlocutory motions by interveners and respondents, and appeals from motions by interveners and respondents. These steps, of course, add to the resources required to carry on this type of litigation, as well as to the time required before final resolution, and as to the potential for adverse cost awards, not only at the end of the day, but upon the various interlocutory motions. In addition to an application for judicial review, should you decide to proceed, you should expect motions to challenge standing of applicants; motions to strike or narrow the relief requested; motions to strike all or parts of evidence submitted; motions to challenge the relief expected; motions to challenge your right to seek the relief requested, and others. Furthermore, deponents of Affidavits should expect to be cross-examined. There may also be interlocutory proceedings initiated by us for disclosure of documents. Although Canadian courts often decline to award adverse costs to public interest litigants, it would not be prudent to count on this course of action. Costs are discretionary to the judge hearing the case, and the Federal Court now has the power under its rules to award adverse costs against parties, both in interlocutory proceedings and at the end of the day. PART IV - LEGISLATIVE SOLUTIONS The best and most expeditious solution to the problem of flying MOX in Canada is a legislative one. It is incumbent upon the responsible Ministers to clarify the state of the law and to make an express statement in legislation or regulation, that MOX / plutonium may not be transported in, over or through Canada by air. This is the situation in the United States where there is a clear legislative statement, as noted above, that prohibits air transport of MOX fuel. This is a reasonable legislative position to take in Canada. It would then be consistent with the United States legal regime, one of the originators of the MOX fuel shipments. It is a much more prudent legislative approach in terms of public safety. Express legislative or regulatory prohibition would bring legal certainty to the question of whether it is legal to transport MOX fuel by air in Canada – that is, that it would be clearly illegal to do so. No administrative decision to allow MOX fuel flight by the AECB and Department of Transport could then be sought by AECL or anyone else. Even more immediately, the federal Ministers responsible should be requested to issue clear policy direction to their respective Departments, immediately, requiring Departmental officials to allow no permits for MOX fuel overflights, pending implementation of the policy in express regulation. Furthermore, the Department of Transport should rescind the approved amendment that it granted on January 10th, 2000, leaving only the November 4th approved ERAPS in place. This would ensure that the additional two shipments of U.S. MOX fuel covered by the approved ERAP could not be flown in Canada. As to the Russian shipment expected at spring break up, a governmental policy directive followed by immediate regulatory provision should be sufficient to prevent the Department of Transport from again amending the Russian MOX ERAP to allow that MOX fuel to be flown to Chalk River. CONCLUSIONS

The public relied on the application documents and the Department of Transport’s original report, accompanying the original approval. It included a statement that flying MOX was illegal in Canada. There was therefore no reason for the public to expect the amendment nor the flights.

We are of the opinion that the decision made by the Department of Transport to amend the Emergency Response Assistance Plan to allow transport by air was unreasonable and therefore illegal, pursuant to administrative law principles.

We are of the opinion that the Department of Transport acted illegally in failing to consult with the public before making a significant amendment to the plan such as changing the approved mode of transport from road to air.

Because of concerns as to future flights of MOX, you should first pursue the solutions described above, under the section titled, "Legislative Solutions".

You should reserve the right to initiate Judicial Review proceedings in the Federal Court of Canada should there be no action by the government of Canada to ensure no continued flights of MOX fuel in Canada.

Pursuant to discussions that you have held with U.S. counsel, Terry Lodge, Esq., Canadian groups and individuals affected by and concerned about the flights of MOX fuel in Canada should support and even join in that U.S. litigation as parties.